One of the main issues for III-nitride growth is the lack of a suitable native substrate. Growth on foreign substrates such as sapphire or SiC results in nitride material with a high density of defects due to large mismatches in lattice constant and thermal expansion. Nonetheless, nitride devices grown on these substrates have demonstrated optical and electronic properties that are practically unmatched by other material systems. In particular, the AlGaN/GaN high electron mobility transistors (HEMTs) constitute a leading candidate for simultaneously realizing ultrahigh-frequency low-noise amplifiers and power amplifiers. Here, we propose to use high quality bulk GaN and AlN substrates for substantial improvements in the operation of AlGaN/GaN HEMTs. We also propose a method of isolating the n-type substrate from the active layer. In this way, we take advantage of the reduced thermal and lattice mismatch, lower density of treading dislocations, and improved thermal conductance to significantly improve the dc and RF operation of these devices. Some projected HEMT device parameters to achieve are a current density > 1.5A/mm, extrinsic transconductance values > 400 mS/mm, fmax > 200 GHz, and power density > 10 W/mm at 40 GHz.